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SUPREME COURT OF INDIA
HRISHIKESH ROY, S.V.N. BHATTI, JJ.
Pawapuri Rice Mills – Appellant
Versus
The Bihar State Food and Civil Supplies Corporation Ltd. and Others – Respondents
Civil Appeal Nos. 1889, 1890, 1891, 1892, 1893, 1894, 1895, 1896, 1897, 1898, 1899, 1900, 1901, 1902, 1903, 1904, 1905, 1906, 1907, 1908, 1909, 1910, 1911, 1912, 1913, 1914, 1915, 1916, 1917 of 2023
Decided On : 18-12-2024
(A) Bihar and Orissa Public Demands Recovery Act, 1914 – Section 3(6) and clauses 8-A and 15 of Schedule I – Public demand – Locus to invoke recovery mechanism under the Act – Section 3(6) of Act by itself does not decide who can be termed as a claimant/creditor before certificate officer, i.e. District Collector – Standing or locus before Certificate Officer is determined by one or other exigencies and descriptions of ‘public demand’ enumerated in Schedule I to the Act – Term ‘public demand’ is of wide amplitude and encompasses all arrears or dues explicitly mentioned or implied in Schedule I – Deliberate legislative design of Section 3(6) and Schedule I reinforces inclusive scope of the term – In present case, Civil Supplies Corporation, acting under State Government’s policy, provided paddy to Rice Millers for custom milling and subsequent delivery of CMR to FCI depots – Claim for recovery of cost of undelivered CMR is claimed as an arrear owed to a State-recognised nodal agent – State Government, as part of changed policy, has dispensed with levy rice scheme from Rice Millers – In place of purchasing levy rice, present policy substitutes availing services of Rice Millers for Custom Milled Rice (CMR) – Agreement between parties explicitly recognises Civil Supplies Corporation’s right to recover dues, and non- delivery of CMR is a documented fact – These jurisdictional facts exist, thereby validating certificate proceedings – Claim qualifies as a ‘public demand’ recoverable under the Act – Nature of transaction, involving procurement of public grain and its distribution, clearly falls within definition of ‘public demand.’ – Civil Supplies Corporation, as a nodal agency of State Government, was acting on behalf of State to ensure smooth functioning of PDS – Jurisdictional fact on initiation of recovery proceedings under the Act is available and legal – Certificate Officer’s jurisdiction to initiate recovery proceedings is established – Rice Millers, by invoking writ jurisdiction, have failed to exhaust statutory remedies at first instance – Appeals dismissed giving liberty to respective Rice Millers to avail statutory remedy as may be available under the Act. (Paras 20, 23, 26, 30, 31, 33, 36, 39 and 41)
(B) Jurisdictional Fact – Import – Jurisdictional fact implies existence of a fact that is necessary to validity of proceeding and without existence of such fact, proceeding before court, Tribunal, or Authority would be a nullity – It is the fact upon which an administrative agency’s power through an act is dependent – Cause of action is stated to be a bundle of facts set out in plaint – Similarly, jurisdictional facts are determined by totality of circumstances in a given case – It is as simple as not omitting from consideration what is obvious – Likewise, a relevant circumstance, even if obfuscated, is not omitted from consideration while deciding a jurisdictional fact – Jurisdictional facts consist of a sequence of events or a bundle of circumstances – Relevant circumstances are determined on a case-to-case basis. (Paras 27& 29)
Facts of the case:
Common issues of fact and law arise in instant batch of Appeals under Bihar and Orissa Public Demands Recovery Act, 1914 and Bihar and Orissa Public Demands Recovery Rules, 1915. Crux of the dispute is the distinction between a statutory body acting in a governmental capacity i.e. as a nodal agent, and acting purely with a commercial intent of its own.
Findings of Court:
In the event of a Rice Miller availing a statutory remedy as permitted by this Judgment, said authority shall entertain case without reference to delay and period of limitation in availing a remedy before said authority.
Result : Appeals dismissed.
JUDGMENT :
S.V.N. BHATTI, J.
1. Common issues of fact and law arise in the instant batch of Appeals under the Bihar and Orissa Public Demands Recovery Act, 1914 (for short ‘the Act’) and the Bihar and Orissa Public Demands Recovery Rules (for short ‘the Rules’) hence, these Appeals are disposed of by this Judgment.
I. BACKGROUND
2. The appellants in Civil Appeal No. 1890 of 2023 and Civil Appeal No. 1889 of 2023 are rice millers in the State of Bihar. The first respondent in the Civil Appeals is the State of Bihar, and the fourth respondent is the Bihar State Food and Civil Supplies Corporation. For convenience, the appellants are referred to as ‘Rice Millers’ and the contesting respondents as the ‘State’ and ‘Civil Supplies Corporation’ respectively. The subject matter of the Appeals relates to the procurement of Custom Milled Rice (for short ‘CMR’) for the procurement year 2011-12 in the State of Bihar. The subject procurement policy departs from the previous policy of collecting levy rice from the Rice Millers. As is known from practice and scheme, levy rice is a system requiring millers to sell a percentage of their rice to the Government at a particular price. Under the levy rice procurement scheme, the Rice Millers buy paddy directly from the farmers at the Minimum Support Price (for short ‘MSP’) and sell a percentage of rice to the Government at a specified price. The Government may purchase the rice from the millers or farmers to implement the Public Distribution System (for short ‘PDS’). The scheme of levy rice was replaced with the present procurement policy of CMR. In this Judgment, we are not examining the reasons or wisdom for the shift in the State’s policy because the State knows what a good and correct policy is while administering and implementing its welfare schemes.
3. In the changed set-up, on 11.11.2011, the Ministry of Consumer Affairs, Food and Public Distribution, Government of India, conveyed the fixation of provisional rates of CMR and the cost of gunny bags of fifty kilograms used in the procurement scheme. The State, through the Development Commissioner, issued the memo dated 07.12.2011, setting out the objectives and major features in the implementation of procurement of thirty lakh metric tons of paddy from the farmers in the State of Bihar for the procurement year 2011-12. The Civil Supplies Corporation has a role to play as the nodal agency of the State for the procurement of paddy during the year 2011-12. In furtherance of such an arrangement, the Development Commissioner, Food and Consumer Protection, Government of Bihar issued the letter dated 07.12.2011 appointing Bihar State Food Corporation as the nodal agency for procuring paddy and entrusting the paddy to Rice Millers for CMR. This letter was sent to all Divisional Commissioners and District Magistrates in the State. The Rice Millers, as per the scheme, are required to enter into an agreement with the State and Civil Supplies Corporation for milling the paddy procured from the farmers. It is a matter of record that the Rice Millers have entered into an independent agreement with the Civil Supplies Corporation. The features of the agreement are that the Rice Millers are required to deliver 67% of raw rice or 68% of par-boiled rice for hundred quintals of paddy in advance, and the Civil Supplies Corporation releases proportionate paddy for CMR by the Rice Millers. The Rice Millers are under an obligation to supply CMR, as directed, to the designated depots/warehouses of the Food Corporation of India (for short ‘FCI’).
3.1. The procurement period is from 15.11.2011 to 30.04.2012. A dispute on the discharge of obligations by the Rice Millers had arisen with the Civil Supplies Corporation. As per the contractual obligations, the Rice Millers asserted that they had milled the rice and were ready to supply CMR to the FCI. Because of a few issues with the FCI, the CMR agreed to be delivered by the Rice Millers was neither accepted nor taken forward.
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